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It seems that every big company I have encountered operates (for low/middle level employees) according to a spreadsheet, where columns are some kind of level or grade, and rows are years of experience.

In my experience, this kind of method shuts down any possibility of negotiations, which instead turns into a simple "You have this position, which is grade X, you have Y years of experience, so your salary is Z per month/year".

While I understand the need for big companies to have some kind of guideline, this makes any attempt for salary negotiation practically impossible, since other benefits are standardized as well, and any attempt at contesting "the spreadsheet" is met with some variation of "We have to follow it to the letter, or every employee will come trying to contest and renegotiate". I have tried to argue about the confidentiality of salaries, to no avail.

Is there a way to go around this? The only way I see is to simply go to smaller companies, where every salary is negotiated individually.

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    Why do you want to negotiate? If the company does not want to pay what you feel you are worth simply move on. At the end, they don't value your experience so why would you want to work for them? – sf02 Oct 16 '19 at 14:15
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    Can you add a country tag? Here where I work, the Collective Labor Agreement reinforces a table like this and there is indeed little room for maneuver – Juliana Karasawa Souza Oct 16 '19 at 15:38
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    Salaries are not confidential. – Nathan Goings Oct 16 '19 at 17:16
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    Didn't we see this the other day, from the other perspective? workplace.stackexchange.com/questions/145709/… – Erin B Oct 16 '19 at 20:36
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    @NathanGoings Its fairly common, actually. – Karl Oct 17 '19 at 23:37

10 Answers 10

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In the end, there are two numbers that count: What you want, and what they are willing to pay. I’m not very good at negotiating in the sense of talking someone into giving me more, which is why I just insist on my number:

You: I want X.
Them: We only have a budget for X-$10,000.
You: I’m sure you can find the money, I want X.
Them: That would set precedent.
You: I won’t tell anyone, I want X.
Them: We can’t pay X.
You: Sad to hear that, call me if you change your mind.

If the number they want to pay and the number you want don’t agree, you walk, but tell that they can come back with a better offer.

And remember you don’t really want to negotiate, you want a good salary. If the big company offers good salaries but doesn’t negotiate, that’s fine.

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    The potential issue with an approach that's this direct is that you may be losing an opportunity to get an increase in salary if you're able to understand and exploit (in a good way) whatever standard the employer has in place. For an employer that has a rigid salary structure, saying "I want X" may get a no, but saying "I can prove that I'm performing according to position Z (which has salary X), how can we work out my promotion to that title?" may actually get you X. – dwizum Oct 16 '19 at 16:26
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    @dwizum Once you get to the point where you can set your salary and negotiate like this, you can walk away and find another employer that will budge just enough. – Mast Oct 16 '19 at 18:05
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    @dwizum This is important. I took a position at a large company at below what I would have accepted normally, and then worked around their salary system to double my salary within a couple of years. – Omegastick Oct 17 '19 at 2:44
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    @dwizum I am sure this happens more than it should, but from an employer's perspective this seems highly inefficient. Essentially, you are losing good employees because they don't have some secret knowledge. I have seen employers (especially lower-level managers) be fairly upfront about this: "we can't give you this salary for formal reason A and B, but here is a way how we could work around this and arrive at a solution that's acceptable for both of us". – xLeitix Oct 17 '19 at 10:13
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    @xLeitix the information is only "secret" to employees who take a stance of "I should be able to demand what I want" instead of bothering to ask a few simple questions and do some legitimate work to justify what they're asking for. At any rate, "good employee" is subjective. From an employer's perspective, someone who thinks they can just demand a salary with a single sentence, and then leave if they don't get it, doesn't strike me as a good employee. From an employee's perspective, that strikes me as an incredibly self-limiting approach, which is why I made that comment and answered below. – dwizum Oct 17 '19 at 12:59
47

You said,

While I understand the need for big companies to have some kind of guideline, this makes any attempt for salary negotiation practically impossible

That's not inherently true. What this approach seeks to do is streamline and objectify the negotiation process, not eliminate it. Many employees seem to think that this means their attempts at a raise will be shut down no matter what, but - when implemented correctly - you can actually use this model as a road map for how to get a raise, instead of it preventing you from getting one. In other words, the structure can be a good thing when you're attempting to get more money - if you can legitimately qualify your request.

To be specific, you asked:

Is there a way to go around this?

The way you accomplish this is to re-frame your approach. Don't try to fight the structure, instead - make the structure work for you.

Standard advice is to base your request for a raise on the value you bring to the company - if you're contributing more, or have learned desirable skills, that can justify a higher salary. If you are currently an Engineer I but you think your work is 10% more valuable to the company than typical Engineer I work - don't go to your boss and ask for a 10% raise. Instead, find the title for the pay grade that would put you at 10% higher compensation (maybe it's Engineer II), and go have a discussion about how you can plan a transition into that role, given that your skills/experience/contributions match that role better than your current Engineer I title.

In essence, salary structures tied to job roles keeps everyone honest. It levels the playing field for both sides - employees get a road map of what they can make for certain jobs, and what skills or tasks or achievements are needed for a given salary. Managers are relieved from having to do one-off negotiations for every single employee. Managers are also prevented from playing favorites, and it's harder for them to discriminate when everything's out on the table in terms of salaries for each given role.

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    The problem with this is that better payed positions normally also come with higher responsibilities. Also does it not solve the issue that your company may be paying below market value. Even with the new position, they still do. Therefore , sooner or later, you'll question the responsibilities, skills and compensation triangle again with the result that you are (still) underpayed. You may be earning more, but anogher company will most likely pay even more for this new position, just shifting the dissatisfaction into the future. – Namoshek Oct 17 '19 at 4:22
  • @Namoshek agreed, and on top of that, there tends to be a pyramid structure of diminishing availability of higher level roles, e.g. a company might have capacity for 100 Engineer I's, but only 10 Engineer II's and one Engineer III's. Presumably if the company had higher grade roles available and OP felt qualified, they would have applied for such a role. The fact that they didn't indicates this is likely not the case, in which case negotiating for a better rate is the only viable route available (other than looking elsewhere). A standard rate structure effectively shuts this approach down. – delinear Oct 17 '19 at 9:05
  • @delinear Well, not necessarily. In general, companies like to keep their costs down, which means they like paying less for more. From experience I'd say that taking over more responsibilities and improving skills is a fluent process without clear borders or milestones, which makes it hard to apply concrete roles (i.e. pay levels) to individuals. As a result of these, it is often in the interest of companies to not trigger a role change because it means paying more for the same work. Some companies are fair and evaluate properly; some don't. If you do more than is your job, ask for more money. – Namoshek Oct 17 '19 at 9:14
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    @Namoshek Yes, taking on more - or different - responsibilities is one of the ways in which you demonstrate increased value to the company you work for. If you're looking to get paid more for staying in the same role, a company with this kind of structure possibly isn't the kind of company you want to work for, and you should look elsewhere. – Anthony Grist Oct 17 '19 at 15:58
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    @Namoshek “The problem with this is that better payed [sic] positions normally come with higher responsibilities.” - yes, that’s why they get paid more. Otherwise known as “mo’ money, mo’ problems”. – s3raph86 Oct 18 '19 at 0:12
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Is there a way to go around this?

Not pragmatically at lower levels and best not to have that discussion, it just marks you as someone who may need to be replaced soon. The implication whenever trying to negotiate is that you may leave if your needs are not met.

Certainly at the higher levels though, especially top levels, everything is up for negotiation then.

The benefit of having the scales is you already know your upper limit in terms of remuneration, so you can decide on known data whether it's time to head to greener pastures.

If you're not content with your pay then one strategy is to hit the top limit and consolidate for a while looking for potential advancement. If nothing eventuates within a reasonable time, look at advancing elsewhere.

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    Thank you, this is basically what I am doing right now, i am at a ceiling, and it looks like the only way up is out. The good thing is that it makes the decision easier. – Sclrx Oct 16 '19 at 9:47
  • It depends on where you work. I tried to do a salary negotiation for a small company who said they could not do so for similar reasons as the OP; however, they did say they could do a bonus which is basically the same thing except the government gets to stick their grubby hands into more of it. So there definitely CAN BE workarounds if the company is willing. In OP's position, I'd press the issue as much as possible, but recognize that they might just not be willing to budge. – ribs2spare Oct 16 '19 at 17:37
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    @ribs2spare I'm not sure for other countries, but in the USA, bonuses are taxed the same as regular pay, it just feels like they tax it more heavily because it's not spread out in the same way. It could be different in other places, though. – Kat Oct 16 '19 at 20:02
  • @Kat while a bonus is taxed the same, it's withheld differently than regular pay. The IRS requires that "supplemental income" be withheld at at least a flat 22%, which for many people is higher than their effective tax rate. taxmap.irs.gov/taxmap/pubs/p15-006.htm – Justin Oct 16 '19 at 20:21
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    @Kilisi exactly. If there's room for out-of-the-box negotiation at a small company with fewer assets, how much more room should there be at a large company with more assets? – ribs2spare Oct 17 '19 at 12:48
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If you are adamant about working for this large company then you need to stop negotiating grade or salary and start negotiating your qualified position. Prove that you are not some average person and really highlight what you bring to the table and why you will excel in a better position.

They clearly have an abundance of people at their disposal so losing someone in that pay grade is merely a ripple in a bucket of water. Their definition of the "right person" is the one that will accept the pay grade. Are you sure you wish to work for such a company?

By arguing that you should be making more while doing the same tasks as the person next to you you are saying that all of the people next to you should be paid more. If you are truly stellar at what you do then you should get promoted rather quickly.

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Welcome to Megacorp. We Excel at Average!

There's some merit to their reasoning, but what such policies really ensure is that they average 44th percentile employees. The purpose is to protect against situations like rogue managers who give unreasonably high raises for less than stellar performance. The tradeoff is that they choose to not reward stellar employees.

Salary bands are usually laughable during hiring. I'm sure there are many exceptions, but I have never personally heard of anyone being hired near the top of one. It is generally reserved for someone who's stayed in the same (or similar) position for a long time. In the end, large companies tend to reward tribal knowledge and complacency over talent and drive.

Generally speaking, go for the big company if you want stable benefits, somewhat more job stability (plenty of pitfalls, still), opportunities within company and the like. They tend to look better on a resume/CV as well. If you want recognition for being outstanding, go small.

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    I fully agree, I tried going small, company downscaled, and I'm back in another big one, that's life, I will look for small again ^^ – Sclrx Oct 16 '19 at 13:45
  • +1 for first line. Well played sir. – Pete B. Oct 17 '19 at 13:58
  • FWIW, my experience between big and small companies is exactly the opposite of what you described. Small companies always seem to be cash poor and pay less with promises of making more as they grow. If they don't grow, you are screwed. Big companies have the flexibility to pay more and they will, ASSUMING they can hire you at the appropriate level. They aren't going to hire someone at the top of the pay range because they can't give that person raises if they do. The only option is to hire the person at a higher level and if the employee's skills aren't up to the higher level, adios! – Dunk Oct 18 '19 at 0:08
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    @PeteB. Heh, I coined it when a former employer sent out a long explanation of all the great ways they were slashing benefits because they'd found they were over average in some cases compared to similar companies. Yet they continued to parrot how their employees were their greatest assets and they strove to retain the greatest employees, etc. – SemiGeek Oct 28 '19 at 14:22
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From my experience, they only ease off whenever you decide to move on. Of course, in your area things might be different, I know that here in Canada, IT resources are very rare and they tend to play that game a little bit (we can't offer you more than X) but they really NEED you.

Remember that it is a negotiation process and they do it on a daily basis. This valuation of year of experience VS salary is conveniently used as a negotiation strategy indeed, you need to be aware of that. They want the best resource at the best price available on the market. That's their job.

Now, if the market allows it, you could "try" to see of far you can push it. You might be surprised how great of a salary you can obtain by playing the "Well thank you, but I can't accept this offer of X. I am truly looking for Y." card.

Good luck.

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In my experience, companies that follow the style you describe have salary bands (rather than a number) based on the position, years of experience and performance. In this case, negotiations are most likely to be successful as long as what you want to achieve is within your salary band. Based on your description, it seems this is a different case, but it would be great to confirm this.

I understand your point, and I feel your pain. Most of the times, "we do not want to create any precedent" is just an excuse, or perhaps a company policy. Quite a poor one, if you ask me. Similar to "if we give you a raise, we need to give everyone else a raise".

You mentioned to them the confidentiality of salaries, which I think was the right thing to do. They didn't agree. Another thing you should always do when trying to negotiate your salary is to justify your expected increase based on your performance (giving clear examples) and avoid comparing yourself to others. When doing that, mention to them that you're asking for a salary raise based on your skills and achievements, and you're not comparing yourself to anyone else, and you expect the company to do the same. You could have two employees in the same position, with the same number of years of experience, but one of them is an absolute star and the other one is just ok.

In the end, if they don't want to negotiate, you don't have a lot of options. Either you accept it, or you try to find a new job.

Last but not least, smaller companies might be more willing to negotiate, but that doesn't necessarily mean you'll get a better salary or benefits.

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    Quite a poor one, if you ask me. - Well, wouldn't you ask for a raise, should you suddenly learn that some colleague of yours (of comparable skills and performance) earns, say, 30% more? Wouldn't you feel mistreated (underpaid) by the company? Wouldn't that negatively affect your loyality and motivation? – Igor G Oct 16 '19 at 10:52
  • Probably a topic that is way too complex to address in an answer/comment. But of course, I would, @IgorG. Does that mean everyone should be paid the same? Isn't negotiation a part of the "game", unfortunately? The way companies work at the moment, it's very likely there will always be someone who's negatively impacted or not compensated as deserved. Not getting a raise because someone else doesn't deserve it is a bad feeling as well. But I totally get your points. – Charmander Oct 16 '19 at 10:58
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I don't know where you live or what industry you work in. I have worked for ... quick counting on my fingers ... 9 different companies in my life, some big and some small, and none of them has had such a rigid system. I've seen such charts for teachers and military personnel, but personally I've never seen that for any other job.

Perhaps in your country or region or industry this is common. Without knowing more I can't say.

So my first thought would be: Just try some other companies. Maybe they don't use such a chart.

Of course if the salary from the chart is what you were hoping to get anyway -- or more -- than the fact that they're using a chart rather than negotiating is irrelevant. You're still ending up in the same place.

Otherwise, in one sense this is not fundamentally different from any other negotiation. You say, "I'll take this job if you'll pay me $X." If they say no, they can't pay that much, then you have to decide whether you are willing to accept what they offer or not. Whether the reason for their lower offer is that they have this rigid formula for determining salaries, or if the boss just makes up numbers as he goes along and that's the number he came up with, so what? Either way, if they're not willing to offer what you think you can get, than they're not willing to offer that, and you say "sorry, no" and move on.

Where it would make a difference to me would be in thinking about a long term career with these people. If salaries are determined by a rigid formula, then whether you're the smartest and hardest-working person in the place, or you spend your days napping at your desk and when you do wake up you mostly screw things up, apparently won't make any difference to your pay raises. They'll go by the formula either way. If you're lazy and incompetent, that sounds great. If you're hard-working and a genius, not so much: you'll get the same as the guy who is lazy and incompetent. More seriously, ignoring the extremes, are you looking for a job where you have security, where as long as you do the minimum you'll get by and be ok? Or are you hoping to impress the boss with your abilities and be rewarded for it, and you're willing to take the risk that things may not work out for whatever reason, your fault or not? Something I'd certainly think about.

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What you are literally asking is difficult.

You are asking a question of the form, “is there a way operating inside of this box to get what I want” and this is very difficult to make happen from within the box.

They are stating, in other words, that they want to follow a specific fair procedure to allocate wages, and you desire to get an outcome which is not directly possible under that fair procedure. This is a direct conflict, and negotiations suck at resolving direct conflicts. Find two kids who both want to use the same doll right now, get them to talk to one another, and you will emphatically not find them agreeing on anything about that doll. The negotiation is pointless if it exists at all, because it exists along one axis.

With that said, it is not impossible. The spreadsheet has rules and you can follow them. “I am sorry to say that this salary is not likely to lead to a deal... is there any way that you can bump me up to the next grade?” or for that matter “I know that on paper I have 4 years of experience but I was working for these two years at a really intense place where I was easily doing 60+ hours/week and the work was much more thoroughly testing my skills here than most people get in a year, perhaps we could say that I have the equivalent of a normal candidate who has 6 years of experience?”

Use negotiation for what it’s good at, instead.

Above I took the example of two kids both wanting to use a doll right nowwww. If one gets the doll, the other does not get it, so any discussion starts at an impasse. Negotiation along one axis is extremely limited—basically, the entirety of one-axis negotiation is “I am going to offer an amount that is too high, they will counteroffer with an amount that is too low, I will counter with some amount that is in the middle but a little towards my side... and we will dance until we end up somewhere halfway between those two initial bids.”

But why am I saying that they are kids? Because kids are short-sighted. Adults who run into the same problem typically have a lot of other courses of action that they consider. Because we don’t just want the one thing, and we don’t just want it right now.

  • Sometimes we want different parts of the same thing; I want the piece of the cake in the middle with less frosting, you want the corner piece because you love frosting. Negotiation fixes this effortlessly.
  • Sometimes we want the same thing, but we want it different amounts; you care a little and I care a lot. Negotiation works really well if you can find two of these: I will give you a lot more of your must-have, since for me it is only a nice-to-have, if you give me a lot more of my must-have, since for you it is only a nice-to-have.
  • Very often we want the same thing but it is not a contested resource. You want respect, I want respect, there is no reason why we cannot both give each other a ton of respect. We both want fairness, we both want to see me working at the company, we both want safety, we both want some mutual problem solved.
  • Sometimes we literally do not care about something that the other side cares deeply about.

These are all situations where negotiation can really shine, and the most powerful thing you can do coming into a negotiation is to brainstorm a bunch of different things you can trade off one way or the other.

In the case of this spreadsheet-salary negotiation, what do they want?

They want a fair process. Judging from the discrepancy with what you want, it sounds like you do not feel they would be paying you a fair wage. Can you prove it? Find a bunch of independent sources for how much you as an employee should be making in that line of work. You want hard labor statistics, precisely because they have indicated that fairness is one of their company values. If you can appeal to unbiased third-party sources you can potentially make your case.

They want to decide a fixed spreadsheet number for your annual salary. That might actually not be so bad for you: you are probably less concerned with the number in the spreadsheet and much more concerned with how much your workload is, versus how much you are making annually. There are lots of other sources of revenue, freedom, joy. Here’s a short list of examples.

  • You could ask for your contract to have a quarterly bonus in it if you meet certain targets. The salary is still in a spreadsheet box, but this arrangement is additional and it is tied to your performance, and thus may seem fair. Or, if you can think of it, you might ask for a commission for certain routine duties that you perform that make the company money.
  • You could ask for a signing bonus, perhaps paid out in four chunks across the course of a year to make sure that you stay with the company when they are paying somewhat below market rate.
  • You could negotiate for less work—for example if you are being hired as a systems administrator, you might say “OK that wage is fine for a 40hr/week job, but I would like it in my contract that at that wage I am not wearing a pager and being on-call during non-work hours. If you want me to be waking up and solving problems at 3AM then that is extra responsibility which should come from a higher pay grade.”
  • You could for that matter ask for an agreement about overtime work being paid extra.
  • You could ask for other things that would make your life more comfortable, “I noticed that we passed several offices that were empty and I would work best in an office, I can do this wage if you can swing me one of those rather than a cubicle. I would even be willing to share it with one of my teammates if it would make executives less wary about the arrangement.” Or for that matter, “I would like to work from a coffee shop every Wednesday, I find that it completely refreshes my brain to simply change my location.” Or, “I have noticed that you have these mandatory-for-all equipment safety meetings weekly and they take up a very large chunk of time, but I am not going to be using any of that equipment, I would like to be excused from those meetings as part of my contract, with the caveat that of course I cannot operate any of that equipment.”
  • You could ask for slightly more paid time off, “I know that you probably give more PTO to executives than to normal folks, I was wondering if maybe you could put me on the executive PTO schedule so that I could have more time to care for my spouse, who has some difficult medical conditions that I find myself needing to take some time off of work to support.”
  • Or you could ask for some extra freedom, “I wanted it in my contract that I get roughly one day a week which I get to use to improve working conditions at your company in whatever way I see fit. Like if I notice that your accounting department is struggling to file certain reports I might decide, with no need for approval from my boss etc., to spend every Friday for a few weeks building a tool that helps them do their jobs better. I promise to use that time in productive ways to better the company.”
  • You could ask for a built-in promotion, “I know you are not hiring me for a senior role just now, but I am interested in that sort of higher responsibility, I was hoping that we could write it into my contract that after a year of work here we would review my performance again and if it was above expectations that I would be promoted into the senior role.”
  • You could also in that same vein ask for more responsibility, “as part of this I would also like to take on the added responsibility of being your scrum master for this job, I figure that is something I can take off of my boss’s plate to free up his time for more important things as well as something that I would really like doing in this transition towards a senior role.”

The point is to brainstorm as many of these as possible and then write them down and bring that paper to the contract negotiation room. You want to be able to say “Oh, you can’t do that? No problem! What about this other thing?”

That is where negotiation shines. It is in finding trade-offs along multiple axes, where we both give each other the cheap things that we both want, I give you more of the things that you want more, and you give me more of the things that I want more.

Very few organizations are totally inflexible. Your goal is to find the things you want that they are happy to give you because they do not care so much one way or the other, and ask them to give those to you abundantly in exchange for your sacrifices on the issues that you have to give up on.

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  • Also, suggest that you become a consultant/contractor instead. And bring in your own statistics of industry averages for your profession. – Stephan Branczyk Oct 19 '19 at 5:24
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Form a union, and bargain collectively instead.

If you're negotiating a wage increase individually, you don't have much bargaining power - your options are basically to take what they're giving you, or leave the business and work for someone else. If you're negotiating on the behalf of a union that represents a majority of your coworkers, however, suddenly you have a lot more bargaining power since you can basically stop the business from functioning by starting a strike.

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  • Care to explain your downvoting? This sort of scenario is literally one of the reasons labor unions got invented in the first place. – nick012000 Oct 20 '19 at 4:54

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